Planning and Financing Business: Revision
Business Studies Revision
Unit 1- Planning and financing a Business
Section 1- Starting a Business
Topic 1- Choosing the right legal Structure
All Businesses fall under either the private sector or the public sector
Within the private sector this would include sole trader and a partnership
Within the public sector this would include PLC and LTD
Private Sector
Sole Trader
This is a business run by a business owner (entrepreneur)
Sole trader business is unincorporated (business and owner are one, no separate legal identity)e.g. owner is fined
Newsagents, dry cleaners, small clothes shops, corner shops
To set up a sole trader, you’d need to register the business at ‘company house’ and have enough finance.
Advantages
Disadvantages
Retain profit
Unlimited Liability
Decision making is easy
Lots of work and long hours leading to health problems
Easy to set up (register and have enough money)
Large competition with bigger companies e.g. newsagents compared to Sainsbury’s local
Various roles to take part in e.g. accountant, selling/ buying, marketing etc…
No one taking some of the risks to share with you
Working for yourself can be motivating
Partnerships
This is when two or more people come together to set up a business
A partnership also has unlimited liability
The common goal of a partnership to make profit.
They both have equal responsibility
Partnerships bring more people into the business and can also be a speciality
How to set up a partnership?
a) Register the name at the company house
b) You must draw up a partnership deed
-Partnership name
- Partnership term
-Partnership premises
-Assets of businesses
- Capital
-Partnership profits and losses
- Drawings
-Sleeping partner
- IN case of death
-Dissolve the partnerships
-Take on more partners
Advantages
Disadvantages
Can discuss ideas
Unlimited liability
Various tasks shared out e.g. specialists which leads to great effectiveness and increased costs
Shared
Unit 1- Planning and financing a Business
Section 1- Starting a Business
Topic 1- Choosing the right legal Structure
All Businesses fall under either the private sector or the public sector
Within the private sector this would include sole trader and a partnership
Within the public sector this would include PLC and LTD
Private Sector
Sole Trader
This is a business run by a business owner (entrepreneur)
Sole trader business is unincorporated (business and owner are one, no separate legal identity)e.g. owner is fined
Newsagents, dry cleaners, small clothes shops, corner shops
To set up a sole trader, you’d need to register the business at ‘company house’ and have enough finance.
Advantages
Disadvantages
Retain profit
Unlimited Liability
Decision making is easy
Lots of work and long hours leading to health problems
Easy to set up (register and have enough money)
Large competition with bigger companies e.g. newsagents compared to Sainsbury’s local
Various roles to take part in e.g. accountant, selling/ buying, marketing etc…
No one taking some of the risks to share with you
Working for yourself can be motivating
Partnerships
This is when two or more people come together to set up a business
A partnership also has unlimited liability
The common goal of a partnership to make profit.
They both have equal responsibility
Partnerships bring more people into the business and can also be a speciality
How to set up a partnership?
a) Register the name at the company house
b) You must draw up a partnership deed
-Partnership name
- Partnership term
-Partnership premises
-Assets of businesses
- Capital
-Partnership profits and losses
- Drawings
-Sleeping partner
- IN case of death
-Dissolve the partnerships
-Take on more partners
Advantages
Disadvantages
Can discuss ideas
Unlimited liability
Various tasks shared out e.g. specialists which leads to great effectiveness and increased costs
Shared